E.O. 12958: DECL: 01/25/2028TAGS: PRELPGOVKDEMFRAGSUBJECT: FRENCH AMBASSADOR: BOUTEFLIKA MAY NOT NEED TOMOVE BUT ALGERIA NEEDS TO

Classified By: Ambassador Robert Ford, reason 1.4 (d)

¶1. (C) French Ambassador Bajolet told the Ambassador on January 23 that he and the French government are worried that Algeria is gradually headed towards more instability, but they do not see an alternative to Bouteflika's remaining in power for a third term beginning in 2009. Bajolet, who served here in the 1980s, said that the French strategicinterest in Algeria above all is stability and economic growth. Increased pressure on Algerians to emigrate to France because of a lack of opportunities in Algeria weighs heavily on French political sensitivities and ultimately on the social ties between the two countries. The Frenchgovernment, he said, sees few positive developments in Algeria now:

-- municipalities, who are closest to the population, have no authority or resources to address needs locally;-- there is an inability throughout the government to make hard decisions; Bajolet called it a kind of immobilism;-- the political parties have little space and seem ready to make short-term deals at long-term political loss;-- public interest in the formal political system has diminished sharply, as seen in the two 2007 elections;-- the business climate is difficult and not improving; and investment and job creation are lacking (Bajolet noted that a French business association had prepared a white paper that detailed problems French companies face in Algeria and how to recitify them. Bajolet observed that the Interior Minister Zerhouni and the Algerian government were anxious that it not be released publicly.);-- corruption, all the way up to the Bouteflika brothers, has reached a new level and is interfering with economic development;

BOUTEFLIKA'S THIRD TERM AMBITIONS---------------------------------

¶2. (C) Bajolet said he understood that the security service leadership has given its approval for the constitution to be changed so that Bouteflika can run for election again in 2009. Bajolet stated that Bouteflika's health is better and that he might live several more years. His improved health and activity has given him more leverage over the army, he speculated. That said, Bajolet also opined that theconsensus within the top security leadership to support a third term for Bouteflika resulted in part from the widespread view that Bouteflika will not finish his third term due to his his health problems. The relationshipbetween the security services and Bouteflika is still ticklish. For example, the French have concluded that the security services encouraged Minister of Veteran Affairs Cherif Abbas to criticize Sarkozy on the eve of the French president's visit in order to embarrass Bouteflika by provoking the French to cancel the trip.

¶3. (C) Bajolet said the French are being extremely careful about what they say to the Algerians about changing the constituton and enabling Bouteflika to run for the third term that everyone understands he will win. Bajolet sensed that the Algerians clearly floated the idea publicly again right before Sarkozy's visit in December to test whether the French president would advise against it. He intentionally did notdo so. Bajolet observed that the French see no obvious successor to Bouteflika. Former Prime Minister Hamrouche, he noted, speaks of reform but the French are unsure whether he could actually push through a reform program. Former Prime Minister Ouyahia, they believe, is yet another apparatchik and has little popularity in the country. Bajolet concluded that without an obvious successor, pushing against Bouteflika simply opens up new sources of instability. Instead, the French have decided that the best message for them to deliveris that they are neutral on the issue of Bouteflika's third term but that the government needs to start addressing Algeria's serious economic and political problems. (Bajolet is particularly interested in decentralization, for example.)

Western schools had put him in a difficult spot, he noted, since there are two official French schools in Algiers. Bajolet asserted that Al-Qaeda in the Islamic Maghreb (AQIM) appears to target the Algerian government mainly and targets foreigners only as a means to embarrass the government. The Ambassador disagreed, expressing his view that AQIM is targeting both but with different goals. It targets the GoA to embarrass it and as a means of retaliating for AQIM losses. It targets foreigners to drive them out of Algeria (and ultimately help destabilize the GoA). Bajolet noted that there are multiple French vulnerabilities, including French cultural centers around Algeria and scattered diplomatic residences. So far, however, the Algerian security services have handled threats to the French appropriately and have, he claimed, kept the French authorities informed.

¶5. (C) COMMENT: Bajolet opined that external pressure on the government here to try to force it to drop the Bouteflika third-term idea will not compel the GoA to drop it. Instead, he thought, it would merely make working with the Algerians more difficult, and the French now perceive that on both security and economic/social issues they must work with Algiers. He readily admitted that the medium- and long-termoutlook here is not good unless the government really begins to fix the economy and the political system. He was not confident that it would, but he had no clear idea of what to do in that case. FORD